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1) Which of the following nations has the highest per capita spending on health care?
A.Germany
B.Canada
C.France
D.United States
2) Public finance is the sub-discipline of economics that studies the various ways in
which:
A.The general public acquire financing for their purchases
B.Governments raise and expend money
C.Firms in the financial sector provide services to households and firms
D.Governments may regulate and promote the stability of the financial sector
3) Comparing what the United States owes to other nations against what other nations
owe to the United States, the United States is currently a(n):
A.Net creditor
B.Net debtor
C.International banking asset
D.International banking liability
4) Answer the question based on the following payoff matrix for a duopoly in which the
numbers indicate the profit from following either an international strategy or a national
strategy.
Refer to the above table. If firm A chooses an international strategy while firm B
chooses a national strategy, then the payoffs will be
A.$3M for both firms.
B.$17M for both firms.
C.$15 for firm A and $5 for firm B.
D.$5 for firm A and $15 for firm B.
5) Social regulation differs from industrial regulation in that:
A.social regulation applies to virtually all industries, while industrial regulation applies
to a restricted number.
B.industrial regulation is involved in the details of the production process, while social
regulation is not.
C.social regulation has expanded less rapidly in recent years than has industrial
regulation.
D.industrial regulation regulates products whereas social regulation regulates prices.
6) Which of the following assumptions about human behavior is most likely to be
accepted by behavioral economists?
A.People have preferences that are unstable and vary by context.
B.People are almost entirely self-interested in their behavior.
C.People plan out decisions well and possess lots of willpower.
D.People eagerly and accurately calculate the benefits and costs of their decisions.
7) Google gained its monopoly power in the market for internet-search service because
it:
A.Is a licensed natural monopoly
B.Was first to market and gained consumer loyalty
C.Took over the market from older firms through creative destruction
D.Advertised its services very heavily
8) If a firm improves its production method, this change will shift the firm's:
A.Total product curve downward
B.Average cost curve downward
C.Average cost curve upward
D.Marginal cost curve upward
9) Suppose a firm is considering the purchase of a machine which when used will
increase its total revenues by $10,000 for the year. The machine costs $8,000 and has a
useful life of one year. The interest rate is 20 percent. This investment should:
A.Be undertaken because the rate of return is 2 percent greater than the interest rate
B.Be undertaken because the rate of return is 5 percent greater than the interest rate
C.Be undertaken because the rate of return is 7 percent greater than the interest rate
D.Not be undertaken because the rate of return is 7 percent less than the interest rate
10) In his book Progress and Poverty, Henry George argued that:
A.poverty is associated with the personal characteristics of individuals and therefore
cannot be remedied by government antipoverty programs.
B.economic rent could be heavily taxed without impairing the supply of land or
therefore the productive capacity of the economy.
C.rents should not be taxed because rental income is the basic source of saving, which
ultimately permits a high level of investment and economic growth.
D.taxes on rents are undesirable because they have a severe disincentive effect on
landlords.
11) Which of the following is correct?
A.Although land has no production cost from society's viewpoint, rental payments are
costs to individual producers.
B.Land rent is not a cost to either society or individual producers.
C.Although land rent is a cost from society's viewpoint, it is not a cost to individual
producers.
D.Land rent is a cost to both society and individual producers.
12)
Refer to the above table. How many units of labor will this firm hire to maximize its
profits?
A.10
B.11
C.12
D.13
13) Which of the following terms implies the greatest degree of confidence in an
economic generalization?
A.Hypothesis.
B.Comparison.
C.Principle.
D.Anomaly.
14) Which of the following is the best example of a fishery?
A.All marine life along the Great Barrier Reef.
B.Pacific halibut.
C.U.S. Department of Fish and Game.
D.Crab.
15) If a firm increases its output quantity when marginal revenue is less than marginal
cost then its profits will:
A.Be positive
B.Increase
C.Decrease
D.Be negative
16) Taking unauthorized work breaks would be an example of:
A.Compensating differences
B.Noncompeting groups
C.Piece rate incentives
D.Shirking
17)
Refer to the budget line shown in the diagram. Given the same money income,
reductions in the prices of both products C and D will:
A.shift the budget line outward on the horizontal axis but leave it anchored at "10" on
the vertical axis.
B.shift the budget line to the left.
C.shift the budget line to the right.
D.have no effect on the budget line.
18) Which of the following occupations is among the ten projected most rapidly
declining U.S. occupations in terms of percentage increases?
A.Medical assistants.
B.Veterinarians.
C.College professors.
D.Postal service workers.
19) Consumers might leave a fast-food restaurant without being served because:
A.they are misinformed about the marginal cost and marginal benefits of the food being
served.
B.they conclude that the marginal cost (monetary plus time costs) exceeds the marginal
benefit.
C.the environment is not conducive to a rational choice.
D.the lines waiting for service are not of equal length.
20) Governments in certain nations are considering adopting policies to raise their low
birthrates because of the concern with having:
A.High rates of inflation
B.High rates of unemployment
C.Too many soldiers for national defense
D.Too few workers to support social programs
